October 17, 2014

Potential Pitfall in Pre-Action Discovery Revealed in Texas

Authored by Eric (Rick) Rein

 in International Asset Recovery

Texas, like five other states, allows for pre-action discovery to discover the potential wrongdoers in an articulated claim. Rule 202 of the Texas Rules of Civil Procedure authorizes a pre-suit deposition to investigate a potential claim. In In re John Doe a/k/a "Trooper", No. 13-0073 (2014), the Texas Supreme Court considered a situation where an anonymous blogger launched an on-line attack of a company that develops and markets software for use by auto dealerships and its CEO. The CEO lives in Houston and the Company has an office in Texas. The blog post included highly critical commentary about the company, its products and the CEO. The Company filed a Rule 202 petition, noting that they anticipated a suit against the blogger for alleged libel, business disparagement and breach of fiduciary duty. In the petition, the deposition of the service provider that hosted the blog was sought and further requested that the service provider disclose the name, address and telephone number of the owner of the blog and the email address listed on the blog. Appearing anonymously through counsel as "John Doe," the blogger moved to quash the petition for lack of personal jurisdiction, asserting his only contact with Texas is that his blog is available to be read in that state.

The court noted that it must have jurisdiction over not only the respondent (the party whose deposition is sought), but also over the subject of the pre-suit investigation about whom the respondent is expected to be deposed. The court found that Rule 202 does not guarantee access to information where the potential defendant's identity is unknown and where the defendant may reside outside of Texas, even if the information is located in Texas. A proper court must implicitly have subject matter jurisdiction, but also must have personal jurisdiction over the potential defendant, even an anonymous one. "[T]he burden is on the plaintiff in an action to plead allegations showing personal jurisdiction over the defendant" and "[t]he same burden should be on a potential plaintiff under Rule 202."

At the moment limited to Texas, there is a significant burden to obtain pre-suit discovery by initially pleading personal jurisdiction not only over the proposed respondent, but also over the ultimate subject of the investigation. Watch for other states to adopt this reasoning.

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